Sunday, August 26, 2018

A Brief Look at a Couple of Really Dumb Ideas

          When I did Living Cheap News, I had a section titled “Dumb Idea of the Month.” There was always a wide selection to choose from.
          I recently came across two news items that I think deserve mention, and no, our streetcar is not one of them. That may well qualify as the dumb idea of the century if not the millennium.

          The first dumb idea comes from Miguel McKelvey, co-founder of and culture officer for New York based WeWork, a co-working firm. He announced that not only will WeWork not serve meat at company functions, it will not reimburse employee meals that contain meat while WeWork employees travel on business. WeWork wisely did not impose those restrictions on those who rent space from them.
          I find this dumb on so many levels but most of all on the level that Mr. McKelvey thinks his employees should not eat meat, so he plans to do what he can to impose his views on his employees. Who knows what’s next? Perhaps lowered performance evaluations for meat eaters?

          The second dumb idea demonstrates that we have a government that works—just not for us. The IRS now has enough data that it has the capability to prepopulate information on a tax form for each of us. Imagine how simple this would be. You get a free online tax form showing your salary, your interest, etc. It’s almost as easy as the postcard our president promised. But it’s not going to happen.
          There is legislation working its way through Congress to prevent the IRS from providing any such assistance, courtesy of our own H&R Block as well as Intuit, the company behind TurboTax.
          Can you imagine not only how easy this would have been? And how much effort and money it would have saved, not only for taxpayers, but also for the IRS, which would probably not have to spend so much money getting people to correct errors that such an online form would have prevented? 

© 2018 Larry Roth

Monday, August 20, 2018

"Give People Money" and "The War on Normal People"--Two Books on Avoiding Dystopia

          Annie Lowrey’s Give People Money: How a Universal Basic Income Would End Poverty, Revolutionize Work, and Remake the World does not really demonstrate how a universal basic income (UBI) would do any of the things listed in its subtitle. This may well not be Ms. Lowrey’s fault, since my experience is publishers will take liberties with titles. My book, The Simple Life, for example was initially titled The New Frugality Anthology, but the publisher decided frugality was too downscale. One contributor dropped out of the project as a result of the title change. If you’ve ever read an issue of Real Simple, you can see why. “Simple” these days can be quite expensive.
          Anyway, back to Ms. Lowrey’s book. It gives a good definition of UBI: “It is universal, in the sense that every resident of a given community or country receives it. It is basic in that it is just enough to live on and not more. And it is income.”
          Ms. Lowrey goes into the history of the UBI, which I found one of the more interesting parts of the book. The Romans had a form of it; Elizabethan England discussed it as a means to alleviate the poverty caused by the enclosure of the commons and the resultant migration to cities. Bismarck proposed a version for Germany. Richard Nixon, Milton Friedman, and other conservatives considered it in the 1970s. Alas, in this country the idea has so far come to naught. It’s like Will Rogers’ comment on the weather—everybody talks about it, but nobody does anything. Maybe this time will be different.
          The book is good when it stays on track. It describes a family of six living in a studio apartment. All have low paying jobs, and some have two jobs. One person contacted her employer (a fast food chain) about how to make ends meet and was told how to apply for food stamps, housing assistance, etc. Ms. Lowrey visits Maine and encounters a woman who has fallen through the holes in the safety net. Ms. Lowrey says the holes are there on purpose—to punish the poor--and points out that with a UBI the bureaucracy could go away (maybe then learning what it is like to be poor themselves—my observation). She points out that many of the benefits the poor have to jump through hoops to get—housing assistance, for example, are readily available to the middle class—the mortgage deduction, for example.
          Unfortunately, the book goes off the track. Ms. Lowrey begins the book with a visit to the DMZ between North and South Korea, goes to Kenya to see how a nonprofit’s $20 a month contribution to everyone in a village has made a difference, and travels to India to see how screwed up a bureaucracy can get—as if she couldn’t find examples in this country. (I could suggest one where local infrastructure is going to hell while subsidized apartments for the rich and a streetcar that duplicates existing bus routes are priorities.) I couldn’t help but wonder if these foreign adventures were not just padding for a 208-page book that could well have been better if it had been shorter.
          Toward the end of the book Ms. Lowrey examines the cost of the program and recognizes that it will be expensive. She then says it may have to be means tested, which means it would not, by definition, be universal, and those who would pay most for the program would not benefit.

          I began the next book on the UBI, The War on Normal People, by Andrew Yang reluctantly. Robert B. Reich had reviewed both in a single review and said, “The two books cover so much of the same terrain that I’m tempted to wonder whether they were written by the same robot… .” After reading both books, I’m tempted to wonder whether Mr. Reich did the same.
          Mr. Yang’s background is orders of magnitude different from Ms. Lowrey’s, as is his book. Yes, they describe many of the same issues, but Mr. Yang has started many companies and has seen the effects of automation from both sides. His book didn’t need padding.
          If you’re in a hurry and can accept that we have major issues of income disparity and that automation will lead to mass unemployment, you can skip to page 165, which is where Mr. Yang proposes solutions. One of which is, of course, a UBI (paid for by a value-added tax). But there are others, including a “Social Credits” program whereby those unemployed and living in areas where there are few if any jobs can earn these credits by helping their neighbors—sort of a barter program that would enable social engagement as well as trading time for services or items of value. Mr. Yang says there are already such programs in nearly 200 communities. He also proposes what he calls Human Capitalism, or investing in activities that are undervalued but necessary, such as teaching, caretaking, and so on. He also proposes that those who adopt practices that put capital over human interests be held personally accountable. He gives the example of Purdue Pharma, which introduced and falsely promoted OxyContin as “nonaddictive and tamper-proof,” leading to the opioid crisis we have now. The company was fined $635 million in 2007, but it made $35 billion since releasing OxyContin in 1995, so the fine amounted to 2%. I also question what good these fines do. The government gets the money. The public gets screwed. At any rate, in Mr. Yang’s world, the Sackler family (who owns Purdue Pharma) would spend time in jail. He also discusses how the same script played out during and after the financial crisis.
          He has some interesting proposals on health care as well. By the way, have you noticed a resounding silence on the part of Republican candidates about the “progress” made dismantling Obamacare?
          I don’t want to steal all of Mr. Yang’s thunder, but one of the closing chapters, “Building People,” has some great ideas on, well, building people. He recommends keeping parents together, an idea conservatives should cheer, and enabling families to have time to spend together, and time is one thing the new world Mr. Yang sees coming will give us.
          Whether we make people spend this extra time in poverty or guarantee a basic level of comfort is yet to be seen. 
          Before you say UBI will never happen, consider this: Mr. Yang’s circle is comprised of the very wealthy. He and many of his friends see the following scenario:
          “There will be a shrinking number of affluent people in a handful of megacities and those who cut their hair and take care of their children. There will also be enormous numbers of increasingly destitute and displaced people in decaying towns around the country that trucks drive past without stopping. Some of my friends project a violent revolution if this picture comes to pass. History would suggest this is exactly what will happen.”

          Many of his friends are buying secure properties. I suggest it would be cheaper to recognize the probable future and avoid the revolution.

© 2018 Larry Roth

Saturday, August 4, 2018

Cambria, California: A Town Without Chain Stores and Fast Food Restaurants,or the Downside of "A Stop in Willoughby"

One of the main reasons for our trip to California was to see the Hearst Castle. It is definitely worth the price of admission.
Our hotel reservations were in Cambria. We had spent a couple of days in Monterey before driving to Cambria. When we arrived I was in the mood for some coffee. We checked in, and I asked if there was a McDonald’s or something similar nearby. The clerk looked shocked. He said, “We don’t allow fast food restaurants in Cambria. We also don’t allow big box stores or chain stores of any kind.”
We wound up getting $5 coffees ($6 with tip) at one of the stores they do allow.
A few years ago we had an abandoned school in our neighborhood. The city wanted to sell the land and accepted some proposals for the sale. One was for a grocery store that was considering relocating. That proposal would have required tax incentives and was greeted with great enthusiasm from many in the neighborhood. As it turned out, that proposal was just a ploy to get the store’s landlord to the negotiating table to lower its lease. The other proposal was from Walmart, which wanted to put one of its neighborhood markets on the land. The store Walmart proposed would have been smaller than the grocery store, and Walmart asked for no incentives. Walmart would even have taken the school building down. The shit hit the fan. After the smoke cleared, Walmart withdrew its proposal. A few years later the city took the building down at taxpayer expense, and the property remains unsold.
The anti-Walmart people won.
I wish everyone who opposes chains could spend some time in Cambria. At first glance, the town is charming. But it’s also expensive. It’s all well and good to limit competition, I suppose, if you’re a shop or restaurant owner, but it’s not too great when you’re on the paying end of the equation. Our afternoon meal the first day cost $30. I had fish and chips (with coleslaw instead of the chips); Dan had a taco salad. We both had water.
I told myself this was a vacation and we should enjoy it, but the final straw was breakfast, which was nothing special and cost $38. We decided to find a grocery store, which was not as easy as you’d think. We finally asked a guy who was working on recycling bins. He directed us to the store, which did not face the street. We bought some groceries and deli food and made do for that evening and the next morning.
We left Cambria and headed to our next stop, Pismo Beach. Along the way I spotted a McDonald’s and a Burger King at Morro Bay. We stopped and had lunch at Burger King with coupons I’d brought along for an emergency. It cost $12.36 for both of us, and we had soft drinks. We hadn’t planned to stop at Morro Bay, but while we were there, we drove around and spent some time on the piers watching fish being cleaned on the boats they came in on and the seagulls feeding on the waste tossed overboard. It was a charming afternoon.
To bring our total trip costs down, we ate at Burger King (using coupons) three more times on the trip. Breakfast cost close to $8, which I found much more palatable than $38.

          I’ve read and written about some of the “back to a golden era” books, and I doubt there ever really was a “golden era.” Even during the “golden era,” people complained that the (now bankrupt) A&P stores were driving mom and pop grocery stores out of business (as documented by Marc Levinson in his 2012 book, The Great A&P and the Struggle for Small Business in America). Before that people complained about catalog companies like (the now troubled) Sears and (the now bankrupt) Montgomery Ward, and before that door-to-door peddlers. It seems people like to complain about things—even things that make their lives easier and cheaper.

          “A Stop at Willoughby,” a 1960 Twilight Zone episode, tells the tale of a man, harried by modern life (nearly 60 years ago), who visits Willoughby, a stop on his commuter train ride home. Willoughby is a town that evokes the good old days (as seen from 1960—an era some folks nowadays look back on as the good old days). Eventually the man decides to stay in Willoughby. Spoiler alert: It turns out Willoughby exists only in the harried commuter’s mind. His stop in Willoughby is a fatal exit from the moving train.

          I wonder if the people who complain about how degraded America has become because of fast food chains, Walmart, and all the modern (competitive) businesses that are available today and long for their own personal Willoughbys ever think what life would really be like if everything were local and expensive.

          Perhaps they should be required to spend some time in Cambria.

© 2018 Larry Roth